The Swiss National Bank (SNB) has abandoned the cap on the franc’s value against the euro after deciding it was no longer justified.

The cap, which was introduced in September 2011, set a minimum exchange rate of 1.20 francs to the euro. This was in response to the “massive overvaluation” of the Swiss franc caused by investors seeking safety amidst the Greek sovereign-debt crisis.

While the franc was held at 1.20 to the euro, in recent months it had followed the euro's decline against the dollar.

The surprise move by the SNB led to chaotic trading with the franc soaring by as much as 30% and shares down 9% by the end of the day. One trader described “carnage” as investors moved to buy “safe haven” assets such as gold and German bonds.